'The industry is under huge cost pressures and that's one way to save money'.
Reuters reports that over the next decade, Wall Street firms will cut in half the proportion of support staff they have in pricey cities like New York and London and shift those workers to less expensive cities in the developing world, according to a projection by consulting firm Johnson Associates Inc.
Today, about half of the employees who handle back-office functions and operations at investment banks work in high-cost locations, Johnson Associates said in a March report.
By 2024, just 25% of those workers will remain in expensive cities, while the proportion in the developing world will jump from 25% to 50%.
'The industry is under huge cost pressures and that's one way to save money', said Alan Johnson, who heads the firm and helps large financial companies develop compensation plans. 'As you look at the cost differentials, and with technology making it easier to do things from remote locations, firms plan to have fewer people here'.
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